Dive Brief:
- Yum Brands again reported divergent results in the U.S. across its major brands. Same-store sales for Taco Bell rose 4%, while KFC and Pizza Hut experienced a 5% drop; and The Habit Burger Grill saw its same-store sales fall by 4%, according to Yum’s Q2 2025 earnings report.
- Yum saw visits per location — a useful proxy for traffic — increase by 0.3%, a significant slowdown from the year-ago quarter’s 1.9% increase, according to data from analytics firm Placer.ai.
- Yum wants to capitalize on its menu innovation process by expanding the Taco Bell Live Mas Cafe concept to 30 locations by year’s end, outgoing CEO David Gibbs said on the company’s Q2 2025 earnings call. Yum will also open several new Saucy locations near KFC’s existing Saucy unit in Orlando later this year.
Dive Insight:
Taco Bell’s strength was driven by a combination of its menu innovation strategy and digital ordering channels. At least 41% of U.S. Taco Bell orders come through digital channels, and the brand’s loyalty program has grown dramatically — 45% year over year — Gibbs said.
The chain's loyalty growth is powered by unique digital activations centered on new menu items like the Mike’s Hot Honey jacket drop, which saw Taco Bell offer 500 jackets to loyalty members in conjunction with the deployment of its Hot Honey Diablo sauce.
Gibbs said that Taco Bell is seeing consumers trade down from fast casual, and that the taco chain is experiencing growth across all income bands, even as other QSR giants report weakness with low-income demographics.
KFC, meanwhile, has lagged Taco Bell’s performance in the U.S., though it remains a key profit and growth engine internationally. Gibbs said that the chicken brand has suffered from challenges in the U.S. and parts of Europe that include “gaps in value perception, inconsistent consumer experience and innovation that has not fully resonated with consumers.” Such issues have left the legacy brand vulnerable to rising competitors like Raising Cane’s and Wingstop.
To address these problems, Yum shifted Scott Mezvinsky from CEO of Taco Bell to KFC earlier this year, and launched new marketing in the U.S. Mezvinsky is using his experience at Taco Bell to help modernize KFC’s brand, Gibbs said, with a strategy focused on “energizing the brand, enhancing its cultural relevance and deepening consumer engagement worldwide.”
Yum’s recent strategy at Taco Bell has hinged on a series of buzzy menu moves. This includes a chicken nugget LTO followed by Crispy Chicken tacos, a new refreshers beverage category, and its combination of value — $5, $7 and $9 Luxe Cravings boxes — and premium items like its Cantina Chicken menu. Taco Bell is currently testing potential changes to its value menu, which is currently in a pilot phase in Indianapolis.
In addition to those menu plays, Yum’s powerful data analytics unit, worldwide reach and wide range of menu categories are helping the company test, deploy and revise a whole host of new beverages meant to capture consumer demand for new flavors and dayparts.
As KFC looks to become more agile with its marketing and menu innovations, specialized concepts and sub-brands like Saucy and Kwench could come to play a similar role to Taco Bell Cantina, which has helped Yum develop new menu niches and premium products.
